Offshore Foundations

Offshore foundation formation services are made available by several offshore foundation service providers who assist and facilitate the process of setting up offshore foundations. Offshore foundations are famous for their effectiveness as vehicles for managing assets.

Offshore foundation formation is a way of achieving a person or business’s financial aims through privacy and reduced taxes. For instance, an offshore foundation can be used for planning one’s estate so that property can be properly allocated to family members and passed on from one generation to the next.

Foundations were originally used in Liechtenstein during the twentieth century and are commonly created in civil law jurisdictions. Currently, foundations are not only formed in the countries of the individuals or corporate entities by which they are formed, but also in foreign countries, thus giving rise to the increasingly popular use of foundations as offshore financial vehicles.

Using a foundation as an offshore entity increases the level of asset protection and tax benefits that a foundation may benefit from. Establishing a foundation offshore in an economically stable jurisdiction with sound offshore laws and well respected offshore foundation corporate confidentiality laws increases the asset protection capacity of an offshore foundation.

Offshore foundation formation is available in a number of jurisdictions where specific laws were put in place for the establishment of both onshore and offshore foundations. Offshore foundations have become popular among both individual and businesses as a result of the number of trained offshore foundation services available in every country across the world. This makes prices for offshore foundation competitive and an offshore foundation an entity that is easily accessible. Providing that the necessary fees and requirements are met for offshore foundation formation, in most countries an offshore foundation can be created within just a matter of a few days. Offshore foundations are required to have a registered agent, a registered office, registered name and the members needed for forming the body of the foundation offshore such as a Protector, Foundation Council, Founder and Beneficiary.

An important component of any offshore foundation is the Foundation Charter. Offshore foundations are all regulated and governed by the offshore foundation’s Charter, which at times, depending on the jurisdiction, may be called a Letter of Wishes. The absence of this document as part of the offshore foundation’s formation documents can result in the entity’s revocation by the incorporating jurisdiction’s Registrar. Offshore foundation formation is very accessible by virtually any individual or corporate entity due to the availability of several offshore service providers and agents that offer offshore foundation formation at competitive prices.

Offshore foundations consist of a:

Protector – the person or company that controls an offshore foundation

Foundation Council – the administrative body of an offshore foundation’s assets

Foundation Charter – contains the by-laws of an offshore foundation and in some jurisdictions is known as a Letter of Wishes

Beneficiary – refers to the person or corporation that ultimately receive or inherits the foundation’s assets

Founder – the person or corporation that forms the foundation

These elements of an offshore foundation are indispensable to the foundation’s formation and structure, and without which an offshore foundation cannot be established and may be revoked or considered inexistent according to the jurisdiction’s offshore foundation laws.

Although offshore foundations are confused with offshore trusts, the two have many basic differences. For example, an offshore foundation is its own legal owner and is not owned by any person or corporation, whilst the assets of an offshore trust are owned by the trustee. Also, an offshore foundation normally has an indefinite duration whereas an offshore trust is established for a given period of time after which the trust may or may not be reestablished.